KV Prenatal Drug Loses Exclusivity

March 31--In a rare move for any regulatory agency, the Food and
Drug Administration on Wednesday announced it would not enforce the
monopoly status it recently bestowed on KV Pharmacuetical Co.'s new
prenatal drug -- a move that could deep-six the company's
controversial plans to charge $1,500 a shot.

The agency's action, amid intense pressure from national medical
organizations, further imperils an already fragile future for the
Bridgeton-based company. KV has counted on the drug, Makena, to
rescue it from a spate of legal troubles, plummeting profits and a
cash crisis.

The company's stock tumbled by 21 percent Wednesday after the
FDA's announcement that it would turn a blind eye if other makers
of the same drug continue to sell it for $10 or $15 a shot -- as
they have for years, under the name 17P.

With its plan to charge 100 times that much, KV had relied on
the FDA's approval last month, which came with a grant of market
exclusivity that normally would drive competitors out of the
market. The company recently sent letters to so-called chemical
compounding firms, warning them that continuing to supply the drug
would violate KV's legal rights.

Now, KV finds itself ensnared in a political thicket, hoping to
escape with its financial health intact. A KV subsidiary issued a
lengthy statement Wednesday, emphasizing its intent to provide
financial assistance to patients seeking to prevent pre-term
births. But the company avoided any direct comment on the FDA's
latest announcement.

A growing chorus of KV critics, meanwhile, lauded the FDA action
as a fitting response to what they view as the drug marketer's
greedy overreach.

KV&apos;s markup is "profiteering at its worst," said Dr.
George Hubbell, the Missouri chair of the American College of
Obstetricians and Gynecologists.

U.S. Sen. Sherrod Brown, D-Ohio, who has castigated KV's pricing
as "irresponsible," called the FDA decision "a victory for pregnant
women, consumers, and taxpayers. This drug, which was developed
with extensive taxpayer support, is too important to fall out of
reach for pregnant women."

"unique situation"

The curious case of Makena highlights troublesome issues that
can emerge in the agency's granting of "orphan status" to drugs --
the designation that won Makena market exclusivity for seven years.
Typically, a company would have to develop a new and innovative
treatment to win the regulators' market protection, and thus recoup
often large research investments. But orphan status grants that
exclusivity to companies that seek agency approval for drugs that
address conditions that occur in fewer than 200,000 patients
annually, and thus represent lower profit potential.

In Makena's case, doctors had for years widely prescribed the
drug to help prevent pre-term births. KV merely paid another
company to push an already existing and widely used drug over the
bureaucratic hurdles to win approval, and bought the marketing
rights for about $200 million.

But the FDA's announcement Tuesday calls that investment into
question, along with the system of granting orphan status. The
agency said it would not enforce KV&apos;s market protections
unless other drugmakers produced unsafe or substandard versions of
the drug.

Asked to quantify the value of the agency's award of market
protection -- given its explicit statement not to enforce it -- FDA
spokeswoman Beth Martino declined to comment. She described KV's
case as a "unique situation."

"For many years, this compound has been available to patients,"
she said.

Martino stressed that the FDA's enforcement actions are
discretionary and that for now it has chosen not to take action
against other suppliers in order to "support access to this
important drug."

Depending on the circumstances, Martino said, "we may revisit
our decision not to take enforcement action."

critics cheer decision

The FDA's decision was hailed not only by specialty pharmacies,
but also by the March of Dimes and the American College of
Obstetricians and Gynecologists, two groups that had met with KV
Pharmaceutical executives Tuesday in Washington in hopes of
persuading them to reduce Makena's price.

"We applaud the FDA for ensuring the availability of this
important medication," said Marcy Bliss, executive vice president
of business operations for Wedgewood Pharmacy of Sewell, N.J.,
which has supplied 17P to individual patients and doctors since
2003. "We're pleased to provide it during this period of
uncertainty."

She said that KV Pharmaceutical&apos;s pricing of Makena had
shocked longtime suppliers. "People considered this a very low-cost
therapy, so a lot of people have asked for an accounting -- a
justification for this increase and how they arrived at this price
point."

The March of Dimes -- which previously had taken the lead in
advocating for Makena's FDA approval -- has turned on the company.
The organization, which has demanded a price reduction, issued a
statement Wednesday saying the FDA's decision "lays to rest any
ambiguities about whether specialty pharmacies can continue to
compound 17P. It would be a tragedy to interrupt access to this
important drug."

billions in profit?

KV Pharmaceutical officials were unavailable for comment, but
its wholly owned subsidiary, Ther-Rx Corp., which is marketing
Makena, issued a statement declaring its commitment to make the
drug available to all medically eligible women.

KV argued that FDA-approved drugs offer important improvements
in quality and consistency over those made by specialty pharmacies
operating under less regulation.

KV also stressed its capital investment in Makena, including its
purchase of the rights to Makena from Hologic Inc., a Massachusetts
firm, for about $200 million. In addition, the company said it will
spend more than $50 million for research and clinical trials. As
part of Makena's approval, the FDA is requiring KV to conduct two
clinical trials in an attempt to confirm earlier findings that the
drug prevents pre-term births and its side effects do not outweigh
its benefits to mothers and their babies.

Those investments can't justify the company's high price,
according to a statement from Sen. Brown's office, which concluded
that -- at $1,500 a shot -- KV could recoup its $200 million
investment 18 times in the first year, netting a $3.7 billion
profit.

To see more of the St. Louis Post-Dispatch, or to subscribe to
the newspaper, go to http://www.stltoday.com.